Hi.

I have a "Contract Law" question regarding termination of our contract with letting agent. Does anyone know the facts?...

We are switching from one letting agent to another. When we asked, in writing, how much notice we needed to give, a director of the agency replied back, in writing, "one month's notice".

Now that a month is up, and our new letting agent is switching the tenancy agreements over, the old letting agent has deducted 3 months' management charges from our final rent roll - in respect of our termination. That's an unexpected loss of 30% of our rent!

On checking, the Management Contract we signed, many years ago, does indeed say that we need to give 3 months' notice. However, the director clearly told us, in writing, one month.

Had the director said "3 months" then we would happily have served 3 months' notice. Had the director said "one month but you still need to pay us 3 months management fees" then, again, we would happily have served 3 months' notice.

We've now pointed out to them the obvious... that we made our decision to serve one month's notice based solely upon the director's guidance. The same director's response (when presented with his written "one month" guidance) was that "the Management Contract makes it clear we have to serve 3 months' notice"! Round and round in circles we go!

Where the heck do we stand, in law? And what can we do about it? The problem is, of course, possession being 9 points of the law - they've got our money! They manage 60-odd properties - so we're talking about a lot of money!

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AlanO
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Hi Alan,

I'm not a legal expert, but usually there is a clause in the contract that says something like "this agreement forms the entire agreement and supercedes any other agreements whether oral or written" however in the absence of such a clause if you can show that you relied on the email then it appears that the email communication would be binding.

That's my understanding. I'm sure a lawyer would know the precise answer.

__________________
Parmdeep Vadesha
Managing Director
Vadesha Properties Ltd

“the species that survived were not the most intelligent –they were the most adaptable to change” Charles Darwin

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Alano - I've got a solicitor mate I can run this by ('if' he has time), so if you want to email me details I'll throw it past him. I'm seeing him on TUESDAY.

Also you can download this document that might be of use :
Principles of the English Law of Contract

* www.Scribd.com is a great site for sharing books/ PDF's etc..

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Cheers Parmdeep and Paul. Hugely appreciated.

I've paid an expensive lawyer - and they have potentially paid for themselves and earned me a bonus already!

Re the main subject, the solicitor has read all our correspondence and confirms the Director of the letting agent "varied the terms" by stating, in response to our direct question, that only one months notice was required - therefore acting illegally by deducting 3 months management fees.

The bonus... the letting agent had also deducted 50% of the final month's rent in reward for finding us tenants. There's a High Court case (OFT vs Foxtons, 2009) which ruled that termination charges are unfair and unlawful - especially when we were charged for advertising to find the tenants, plus new tenant setup fees, etc. So we have just gained the right to have that 50% of month's rent returned.

Of course, the letting agent, having already deducted those charges from our rental payments, may decide to take this to court rather than cough up! I'll keep you all informed - as this may be a useful reference for somebody else in future.

Cheers,

__________________
AlanO
Leads wanted in England, Scotland and Wales. We buy Cash/Nett. Market-leading fees paid
NEW IMPROVED: We pay any fee! for pre-agreed London 25%+ BMV deals. We buy with hard cash. See website for conditions
www.LeadIntroducer.co.uk

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Nicely done

A lot of these types cases go to the wire and when they realise they cannot win they often settle before it goes to court.

__________________
Parmdeep Vadesha
Managing Director
Vadesha Properties Ltd

“the species that survived were not the most intelligent –they were the most adaptable to change” Charles Darwin

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